v3.22.2.2
Income Taxes
 12 Months Ended
Jun. 30, 2022
Income Taxes

Note 13. Income Taxes

Pre-tax loss consists of the following jurisdictions (in thousands):

 

 

 

Years Ended June 30,

 

 

 

2022

 

 

2021

 

 

2020

 

Domestic

 

$

(54,454

)

 

$

(41,306

)

 

$

(47,172

)

Foreign

 

 

—

 

 

 

—

 

 

 

—

 

Pre-tax loss

 

$

(54,454

)

 

$

(41,306

)

 

$

(47,172

)

The reconciliation of income tax computed at the U.S. federal statutory tax rates to income tax expense is as follows (in thousands):

 

 

 

Years Ended June 30,

 

 

 

2022

 

 

2021

 

 

2020

 

 

 

$

 

 

%

 

 

$

 

 

%

 

 

$

 

 

%

 

Tax benefit at U.S. statutory rates

 

$

11,435

 

 

 

21

%

 

$

8,674

 

 

 

21

%

 

$

9,906

 

 

 

21

%

State tax

 

 

191

 

 

 

0

%

 

 

(99

)

 

 

0

%

 

 

9

 

 

 

0

%

Warrant liability costs

 

 

4,358

 

 

 

8

%

 

 

3,806

 

 

 

9

%

 

 

(4,803

)

 

 

(10

)%

Equity compensation

 

 

(71

)

 

 

0

%

 

 

(6

)

 

 

0

%

 

 

(2

)

 

 

0

%

Increase in valuation allowance

 

 

(15,473

)

 

 

(28

)%

 

 

(10,536

)

 

 

(26

)%

 

 

(4,473

)

 

 

(10

)%

Other

 

 

(440

)

 

 

(1

)%

 

 

(1,847

)

 

 

(4

)%

 

 

(638

)

 

 

(1

)%

 

 

$

0

 

 

 

0

%

 

$

(8

)

 

 

0

%

 

$

(1

)

 

 

0

%

 

Deferred tax liabilities and assets are comprised of the following (in thousands):

 

 

 

June 30,

 

 

 

2022

 

 

2021

 

Deferred tax assets (liabilities):

 

 

 

 

 

 

Deferred revenue

 

$

20,362

 

 

$

16,637

 

Fixed and intangible assets

 

 

13,283

 

 

 

15,924

 

Share-based payments

 

 

4,869

 

 

 

4,182

 

Tax losses carried forward

 

 

29,581

 

 

 

16,104

 

Compensation accruals

 

 

927

 

 

 

727

 

Consultant and other accruals

 

 

25

 

 

 

22

 

Right-of-use assets

 

 

(1,932

)

 

 

(1,633

)

Lease liabilities

 

 

2,057

 

 

 

1,742

 

Charitable contributions

 

 

7

 

 

 

1

 

Total deferred tax assets (liabilities)

 

 

69,179

 

 

 

53,706

 

Valuation allowance for deferred tax assets

 

 

(69,179

)

 

 

(53,706

)

Net deferred tax assets and liabilities

 

$

—

 

 

$

—

 

We evaluate the recoverability of the deferred tax assets and the amount of the required valuation allowance. Due to the uncertainty surrounding the realization of the tax deductions in future tax returns, we have recorded a valuation allowance against our net deferred tax assets as of June 30, 2022 and 2021. At such time as it is determined that it is more likely than not that the deferred tax assets will be realized, the valuation allowance would be reduced.

We had federal and state net operating loss carryforwards of approximately $133.9 million and $23.8 million as of June 30, 2022. The federal net operating loss will carry forward indefinitely subject to an 80% taxable income limitation. The state net operating loss carryforwards will begin to expire in 2030 unless previously utilized.

Our ability to utilize our net operating loss carryforwards may be substantially limited due to ownership changes that have occurred or that could occur in the future under Section 382 of the Internal Revenue Code and similar state laws. During 2022, we completed a study to analyze whether one or more ownership changes had occurred and determined that two such ownership changes did occur. While the ownership changes do limit the amount of net operating loss we are able to use each year, all of our net operating losses are expected to be available for utilization prior to expiring.

None of our prior income tax returns have been selected for examination by a major taxing jurisdiction; however, the statutes of limitations for various filings remain open. The oldest filings subject to potential examination for federal and state purposes are 2019 and 2018, respectively. If we utilize a net operating loss related to a closed tax year, the tax year in which the loss was incurred is subject to adjustment up to the amount of the net operating loss.

We have not reduced any tax benefit on our financial statements due to uncertain tax positions as of June 30, 2022 and we are not aware of any circumstance that would significantly change this result through the end of fiscal year 2022. To the extent we incur income-tax related penalties or interest, we will recognize them as additional income tax expense.